To start off, there’s no one perfect percentage of your money to save, although experts recommend saving at least 10% of your income. But everybody has different expenditure patterns, different current needs and different future plans.
What’s most important is that you know why you’re saving. What is the purpose of your savings?
The next step is to understand something very simple.
Saving money simply means spending less than you earn.
Hold on, if you’re not earning anything, don’t leave just yet. Do you have an allowance from your parents? That could count at this stage. So saving money means not spending all of your allowance.
How Do I Start Saving?
- Figure out your purpose.
- Decide how much you want to save. It’s important to be realistic because you want to be consistent. There is really no point in being able to save 50% this month and ending up saving 0% for the next few months. Consistency is key when it comes to building a good savings habit.
- Open a savings account. Please don’t use piggy banks anymore. You’re way past that. I mean this as a compliment. You’re now mature enough to handle a savings account. Ask your parents to open one for you and show them that you can be a responsible teenager.
Consistency is key when it comes to building a good savings habit.Tweet
Understanding the Importance of Saving
At this point in your life, you’re probably saving up to buy something, pay for a trip with your friends before your start university, or if you belong to the ones that actually plan for the future at this age, you’re probably saving up to help your parents pay for your tertiary education. Whatever your reasons for saving, it’s legitimate.
What I want to do here is to tell you the real reason why you should save, especially when you transition into being adults.
- For Emergency
When you are adults, money doesn’t come to you in an endless stream. It only comes when you are holding a paying job or when your passive income is still earning something. It is imperative that you save a considerable amount (experts recommend 6 months’ worth of you salary) for situations whereby you’re in between jobs.
- To Make More Money
Believe it or not, you need money to make more money. You can’t delve into investing if you do not have spare cash. The earlier you start to save and the more amount you save, the more you have to benefit from investing and compound interest.
You need money to make more money, and one of the easiest way to start is to save.Tweet
How to Save MORE?
The easy and cheeky answer is to spend less! But sometimes it doesn’t come easily to people what this actually entails. Here are some tips to help you save:
- Choose the cheaper price tag over what is cool or popular.
- Eat at food courts or hawker centers rather than at fast food restaurants or cafes.
- Hang out with friends doing free activities i.e. limit outings to the movies.
- Eat at home before you head out to meet your friends. Even better if you make appointments that do not fall on meal times.
- Skip the drinks. Really, just put a bottle of water in your bag and fill it up from home or other water-coolers you can find in public places.
- Do not buy on impulse. Mull over it for a week. If you still want it next weekend, go ahead and get it. If not, leave it.
- Have you ever thought of earning? Aha! Here are some ideas you can try out from the comfort of your home. But then again, these aren’t immediate paying-jobs but it can help you earn in the long run, if you do it right.